STTG Market Recap Mar 20, 2013

Cyprus fell off the financial media’s radar and Ben Bernanke returned, so all was good in the world once more.  This despite a warning by bellweather FedEx (FDX) and bad monthly sales data out of Caterpillar (CAT).  The Federal Reserve two day meeting wrapped up and with no changes in policy and soothing words from the Chairman it was as if the Euro-drama did not exist; you heard almost not a peep of it today.  Similar to how Italy was a major subject for a day or two in mid February and then disappeared.   The S&P 500 gained 0.67% and the NASDAQ 0.78% and almost all the Cyprus related losses have disappeared.

While the S&P 500 broke its channel yesterday it was by a nose so as was written in yesterday’s recap: “A few points here or there are too close to call as a break…”  Today the index went firmly back into the channel as risk was put back on.

The NASDAQ likewise climbed into the bottom end of its channel after a quick exit.

In normal times seeing warnings from FedEx (FDX) and Caterpillar (CAT) would put a dent in the market.  But we are not in normal times.  Further after the bell, tech giant Oracle (ORCL) reported disappointing revenue and earnings – these are three of the most global companies there are – but stocks just keep on ticking.

FedEx (FDX) experienced a high volume selloff as guidance disappointed:

FedEx Corp. (FDX) tumbled the most since September 2011 after lowering its 2013 earnings forecast and planning capacity cuts in Asia amid a widening customer shift to its cheaper overseas delivery services.  Profit in the fiscal year through May will be $6 to $6.20 a share, down from an earlier projection of as much as $6.60, the Memphis, Tennessee-based company said in a statement today. The forecast and fiscal third-quarter profit both trailed analysts’estimates.

Caterpillar (CAT) has been a no show in 2013 as it seems to be more levered to a slowdown globally than any rebound in the U.S. – today’s update was not very encouraging:

Caterpillar Inc. said Wednesday that global sales of its heavy equipment fell 13 percent for the three-month rolling period that ended in February, hurt by a steep drop in Asia Pacific demand.  Asia Pacific sales dropped 26 percent in the recent period, while North American sales fell 12 percent. The only region to post an increase was Latin America, where sales rose 3 percent.

On the positive side we have the housing sector, where Lennar (LEN) continued the good news in the sector – reporting a strong quarter.   The chart shows the stock breaking out of a two month “cup” of a cup and handle formation.

Lennar reported earnings of 26 cents per share, up 226% from last year’s 8  cents. Analysts surveyed by Thomson Reuters were expecting 15 cents. Revenue  surged 37% to $989.9 million, topping analyst calls for $897.99 million.

Fast casual dining has also been a strong spot of late – Burger King (BKW) had a major jump in price on heavy volume mid February and has been on a roar since.  The stock has surged the past two sessions.


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